The Behavioural Science of Online Manipulation
NO ONE WOULD ARGUE that the Internet has transformed the way we live, work and play. Today you can make ‘friends’ around the world without ever saying hello; compare products from dozens of shops without leaving the house; or plan a date with a stranger without breaking a sweat. But while the benefits of life online are significant, so too are the economic and social costs.
By now, most readers are familiar with the term ‘nudge’; but there is a darker side to the evolution of online and digital markets: ‘Sludge’ and other techniques seek to harness our behavioural biases against us rather than for us.
Nobel Laureate in Economics Richard Thaler, a long-standing adviser to the Behavioural Insights Team, often signs his books with the maxim ‘Nudge for good’. In this article we will explore some of the ways in which organizations might seek to enact this sentiment in the online world to shape its evolution —and build fairer, better online markets.
Exploiting Consumer Biases
In the same way that our behaviour in the offline world is sensitive to subtle cues from the environment, our behaviour online is shaped by the design and characteristics of the websites, platforms and apps we interact with. Nobel Laureates Robert Shiller, George Akerlof and Thaler have written about how companies seek to manipulate and exploit our cognitive biases and psychological weaknesses. Two types of manipulation identified by them are particularly common: The deliberate exploitation of information deficits and behavioural biases (‘phishing’); and the deliberate addition of frictions and hassles to make it harder to make good choices (‘sludge’). Let’s take a closer look at each.
Companies have long used techniques to target and exploit our psychological weaknesses. Shiller and Akerlof call this . Offering a cash-back deal is a classic example. The vast majority of us erroneously predict that we will go to the effort of actually claiming the money. Our purchase decisions are more sensitive to the of the cash than to the required in actually claiming it, while redeeming the cash-back offer is driven more by the effort involved than the
